No Fee Credit Card Processing: Understand the Fine Print

No fee credit card processing may be available if you purchase the equipment from the credit card provider. Other fees may apply, so always read the fine print.

No Fees?

Merchant account providers make their money by charging you fees to process credit cards. Before signing an agreement with any credit car provider, read the fine print of your service agreement to be certain if fees will apply, and how much they will be. Some providers will offer zero setup fees in order to gain your business. Providers have termed zero set-up fees the no fee credit card processing. Be careful to alway read everything because no credit card provider will offer you processing services completely free of charge.

Rates and services vary, depending on the monthly amount of credit card transactions and whether the transactions are made with the card, such as in the store.

Important Rates to Know

Discount rate is the percentage of the transaction charged to the business for the use of the card. The rates vary depending on the method of payment used, see below for a list of cards rates, ranging from lowest to highest:

Debit card-lowest processing fees

Diner s Club

Visa and MasterCard

Discover Card

American Express-highest processing fees

A debit card will offer you the lower rate for the transaction, but only if it is used in conjunction with a PIN pad rather than swiped as a credit card. A debit card offers a qualified rate for processing credit cards. Qualified rates are the lowest rates charged and occur during a secure transactions. The swiping of a card is an example of a qualified rate.

A mid-qualified rate occurs when you have to key in the card number, instead of swiping the card. The processing fee tends to be a percentage point or so higher than the above qualified rate.

The non-qualified rate occurs with less secure transactions, like a keyed entry that doesn t include address verification. Also, mail order and telephone transactions are non-qualified transactions. The processing rate for these transactions will be higher than both qualified and mid-qualified rates.

Common Fees

Minimum monthly fee is the fee you will be charged when your other fees don t add up to a specific amount. This fee is common for low-volume accounts.

Transactions fees are flat rate fees for each transaction made. The amount depends on the transaction method used.

Setup fee is the amount charged by the merchant account provider to create your account.

Batching fees are small fees added to the batch processing at the end of the day.

Applications fees are sometimes charged by providers for them to process your application. You will need to be sure this fee is refundable, in case of rejection.

Chargeback fees are assessed when a charge is reversed, it doesn t matter if the reversal was successful or not.

Authorization fees are assessed every time a transaction is sent to a bank for authorization, regardless of approval or rejection.

A statement fee is charged for your monthly statement of transactions.

A gateway fee is your monthly charge to access the payment gateway on a secure server.

A cancellation fee will require you to pay a fee if you decide to discontinue your account with your provider.

All of these fees will are written according to your company’s individual account. You can choose each vendor individually, which will mean you are paying several fees to many different credit card processing providers. Or, you can have your merchant account provider sell you a package that allows you to pay to fewer processing providers. Always read the fine print of any service agreement before you sign.